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March Builder Confidence Flat As String of Increases Ends

Builder confidence was flat in March, matching a downwardly revised February index of 28, the first time in six months the index has not increased, the ""National Association of Home Builders"":http://www.nahb.org/ reported Monday.

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The builder assessment of present home sales conditions actually dipped in March, falling to 29, the first decline since last September. The outlook for home sales in the next six months rose to 36 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the highest level since June 2007 - from 34 in February. Buyer traffic was flat in March at 22.

The index, based on surveys conducted jointly by the NAHB and Wells Fargo, gauges builder perceptions of current single-family home sales and sales expectations for the next six months as ""good,"" ""fair"" or ""poor.""

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The survey also asks builders to rate traffic of prospective buyers as ""high to very high,"" ""average"" or ""low to very low."" Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

""Builder confidence is now twice as strong as it was six months ago, and the West was the only region to experience a decline this month following an unusual spike in February,"" NAHB Chief Economist David Crowe.

""That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets,"" he added.

The drop in the index in the West census region was precipitous ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a 10 point plunge to 33. The index in the West soared in February to 43 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô its highest level since August 2006 - from 21 in January.

The national index remained below the ""break-even"" level of 50 for the seventy-first consecutive month.

In February, when the index was reported at 29, Crowe acknowledged the index was ""still very low,"" so the downward revision can't be seen as good news.

While the HMI has doubled since September, new home sales have barely budged, last reported at a seasonally adjusted annual rate of 316,000 compared with an SAAR of 302,000 in September.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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